S’pore economy is not overheating: PM Lee

Inflation well under control even though economic growth this year is expected to be 7-8%

(BUDAPEST) Singapore Prime Minister Lee Hsien Loong yesterday said that he did not believe the Republic’s economy was overheating, with inflation under control despite firm economic growth.

‘This year, we expect 7-8 per cent growth. It’s a good figure but at the same time inflation is well under control,’ Mr Lee said.

He acknowledged that property prices had increased rapidly and that there were shortages in office space, which the government was trying to solve by, for example, building interim office space.

‘In the medium term, we will have enough supply but in the short term there is a problem because so many businesses want to set up in Singapore,’ Mr Lee said after officials from the two countries signed cooperation agreements on economic, scientific and educational matters.

Mr Lee also described the situation in Myanmar – where the government has violently suppressed pro-democracy protests – as ’serious’, saying international powers needed to work on bringing together the two sides of the conflict – the ruling military and the opposition groups.

‘What is necessary is to find reconciliation and an agreement amongst the parties in Myanmar on the way forward,’ he said after meeting his Hungarian counterpart, Ferenc Gyurcsany. ‘There’s no easy way forward . . . It is not simply a matter of regime change,’ Mr Lee added.

‘I think that if you look at Iraq, you know that regime change is a slogan but may not be a policy.’

 

Source: AP (Business Times 10 Oct 07)

Reality bites Resorts World at Sentosa

MARK Burnett – creator of reality TV shows like Survivor and The Apprentice – has tied up with Genting International to produce TV and game shows for the region.

Speaking at a tele-conference yesterday, US- based Mr Burnett, president and founder of Mark Burnett Productions, said that filming for the first show could begin as early as next year.

Based at Resorts World at Sentosa, the firm will use the resort’s attractions and facilities for some of its productions.

A joint-venture company called Mark Burnett Productions Asia (MBPA) will be formed, with the two partners holding equal equity and investing up to US$20 million together.

The two partners were brought together in June by the Singapore Economic Development Board (EDB).

Manohar Khiatani, assistant managing director of EDB, said: ‘This decision underscores the attractiveness of Singapore as a location where leading media content owners create and manage their intellectual property assets.’

He said MBPA would reinforce the government’s efforts to build Singapore into an international media hub.

Mark Burnett International and Genting International will team up on a 10-year exclusive partnership to develop, produce and distribute reality TV series and game shows for the region. The partnership covers all of Asia except Japan and the Middle East.

Mr Burnett said: ‘We’ve been doing business in and around Asia since our company was founded and we’ve been looking at ways to do more in this massive market.’

Besides producing TV for Asia, MBPA will hold an exclusive licence to produce and distribute these programmes to multiple media platforms that range from broadcast, the Internet and mobile television.

The company will also develop original TV shows for Asia that will be licensed for format productions worldwide.

Mark Burnett Productions has already made forays into other markets. Scot Cru, executive (international), Mark Burnett Productions, said: ‘Having recently launched Mark Burnett Productions France, this is a natural evolution of our worldwide brand.’

He added: ‘The fact that this deal was fast-tracked and took a very short time to negotiate is evidence of both companies’ recognition that it is a partnership that both companies felt was a no-brainer.’

 

Source: Business Times 10 Oct 07

Shophouses in the CBD for sale

A BLOCK of 13 conservation shophouses in Telok Ayer and Boon Tat streets is for sale through an expression-of-interest exercise at an indicative price of $67 million.

This works out to about $1,200 per square foot based on the gross floor area of some 56,000 square feet.

The shophouses are on land that totals 16,987 sq ft and have 999-year leasehold tenure from 1884.

They are zoned for ‘commercial’ use, but Ho Eng Joo, executive director (investment sales) at marketing agent Colliers International, believes that the buyer could amalgamate the interiors into a single large floor plate to achieve greater space efficiency. This would make the property suitable for creative companies such as advertising or design agencies or for financial and professional services firms.

‘The tight office supply and the surge in office rents have resulted in an increasing number of tenants seeking alternative commercial space such as shophouse units, as well as investors looking for well-located shophouse units for investment,’ Mr Ho said.

He estimates the current yield to be around 2.5 per cent. The first storey of the shophouses is now used mainly by food and beverage outlets, while the upper storey is occupied by office tenants.

Mr Ho reckons the potential yield could be 5-5.5 per cent based on rent of about $5.50 psf per month.

It is rare for so many shophouses to be offered in one transaction. The recent sale of three shophouses in Ann Siang Road for $28.8 million worked out to $1,519 psf over their floor area.

Mr Ho said that most shophouse transactions involve individual units. A shophouse in Amoy Street was recently sold for about $1,100 psf, he said.

 

Source: Business Times 10 Oct 07

Singapore Roundup

Interest in old Tiong Bahru flats

A STATE property consisting of some old flats at Tiong Bahru Road has attracted much interest, with the highest bid of $230,280 per month coming from Katong Hostel Pte Ltd. Blocks 1, 3, 5, 7 and 9 along Tiong Bahru Road, which together have 120 flats with a total floor area of 9,840 square metres, have been slated for residential use. The development, which has a lease of three-plus-three years, has 60 three-room flats and 60 four-room flats. Fifteen companies have put in bids for the properties, according to the provisional tender results.

Singapore, Hungary scientific pact

A*STAR has signed a master collaboration agreement with Hungary’s National Office for Research and Technology (NKTH) to promote scientific R&D and enhance human capital development. The signing of the pact by A*Star chairman Lim Chuan Poh and NKTH president Ferenc Partos was witnessed by Prime Minister Lee Hsien Loong and his Hungarian counterpart Ferenc Gyurcsany. A joint committee will identify scientific fields of mutual interest and encourage joint projects between scientists of both countries.

 

Source: Business Times 10 Oct 07

Citigroup buys stake in Nitesh Estates: report

(MUMBAI) Citigroup will pay around US$250 million for a minority stake in Indian real estate firm Nitesh Estates, the Economic Times said yesterday.

The deal would see Citigroup partner privately owned Nitesh in the Indian firm’s hospitality venture, which involves setting up at least five luxury hotels and possibly malls also, the newspaper said, citing sources close to the deal. Nitesh Estates declined to comment, the paper said.

The head of Citigroup Property Investors told Reuters in April that the unit was investing around US$400 million in India, and that it had tied up with seven Indian developers, including Nitesh, for a US$100 million luxury hotel in Bangalore.

A spokesman for Citigroup in India did not immediately return a call seeking comment on the report.

 

Source: Reuters (Business Times 10 Oct 07)

KL extends IDR incentives to developers

PM says ‘customised incentive packages’ for bigger investors with specific needs can be considered

IN KUALA LUMPUR

THE first section of Malaysia’s planned Iskandar Development Region, across the straits from Singapore, was yesterday identified for special incentives for approved companies.

It is called Node 1 and covers 96 million sq ft – 8.9 sq km – of greenfield waterfront land between the Johor state new administrative centre and the second crossing to Singapore.

The IDR-status companies for Node 1 must operate in six specific service sectors, as announced in March: creative industries, education, financial advisory & consulting, healthcare, logistics, and tourism.

The first package of incentives, which includes 10-year income tax exemptions for certain qualifying activities, will be extended to approved developers and approved development companies as well as IDR-status companies.

Approved developers are those acquiring sub-lease rights to lands within Node 1, while approved development managers are those sanctioned by the developers. In effect, these would be companies which acquire some interest in the building or management of components within the node.

The first node which has already attracted some Middle Eastern investment, is envisaged as a comprehensive development including leisure, residential, financial and high-end industrial components.

Yesterday, Prime Minister Abdullah Ahmad Badawi indicated that the government was also prepared to consider ‘customised incentive packages’ for bigger investors with specific needs.

Mr Abdullah told a press conference in Putrajaya after he co-chaired the third Iskandar Regional Development Authority board meeting: ‘If it is important to do that, we certainly can (consider). The point is we can have discussions with them to decide.’

Malaysia is actively promoting the IDR – which is intended eventually to cover an area about three times the size of Singapore – as a new economic zone for the country and surrounding region.

Some RM4.3 billion (S$1.8 billion) would be injected by the government into infrastructure development for Node 1, and with an estimated RM40 billion required in the first five years alone, huge levels of private investment are needed to drive the plan.

In August, the IDR received its first major boost when four Middle Eastern groups – Aldar Properties, Mudabala Development Company, Kuwait Finance House and Millennium Development International Company – committed about RM4.1 billion to develop the whole area of Node 1 into various themed zones that would include lifestyle, cultural and financial districts.

 

Source: Business Times 10 Oct 07

Sub-prime defaults could total US$150b, says S&P

Crisis will not peak until 2009, but emerging markets offer silver lining

(MUMBAI) The US subprime housing crisis will not peak until 2009 and total defaults could reach US$150 billion, rating agency Standard and Poor’s said yesterday, but robust emerging markets would help keep global growth strong.

S&P expected the world economy to grow 3.6 per cent in 2007 and 3.5 per cent in 2008. The US economy would lag at 2 per cent in both years, down from 2.9 per cent in 2006.

‘World growth remains strong despite the weaknesses seen in the US economy – especially in emerging markets because of healthy domestic demand conditions and export strength to non-US markets,’ S&P said in a report released in Mumbai.

‘The fact that the US slowdown is concentrated in housing, which has relatively low import content, helps,’ it said.

Emerging markets were far less vulnerable to credit market turmoil than during previous crises because of the capital flows attracted by high economic growth coupled with improved corporate governance standards, S&P said.

Moreover, high commodity prices were also helping many emerging market economies, such as Latin American and African countries that are major exporters.

S&P estimated that, on a purchasing-power parity basis, the United States would contribute only 9 per cent of world growth in 2007, compared to China’s 33 per cent and India’s 12 per cent.

Housing was the major weakness in the US economy and the sub-prime crisis – which roiled global markets in late July and August – was far from over, although its shock value was wearing off, David Wyss, S&P’s chief economist, said.

‘We think in the United States the housing market is not going to bottom until winter. We think the losses in these sectors won’t really hit their peak until 2009,’ he said.

That would feed through to unemployment and remain a brake on growth.

‘Housing starts are going to drop further, the unemployment rate is going to tick up further, we are expecting another year of sluggish US economic growth,’ Mr Wyss said.

‘We are not halfway through with this crisis yet.’ Mr Wyss expected the US trade deficit to shrink in coming months as stronger overseas growth and a weaker dollar would make US exports more competitive.

 

Source: Reuters (Business Times 10 Oct 07)

IMF cuts growth forecasts, warns of downside risks

World growth seen at 4.8% next year, driven mainly by emerging economies

ROME – THE International Monetary Fund (IMF) has slashed its forecast for growth in the United States next year and made more modest downward revisions to its outlook for the euro zone and Japan, Italian news agency Ansa reported yesterday.

Citing a draft version of the IMF’s World Economic Outlook to be issued next week, Ansa said the IMF now sees US growth next year at 1.9 per cent, compared with a 2.8 per cent projection made by the fund on July 25.

The IMF has cut its forecast for world growth next year to 4.8 per cent from 5.2 per cent, with emerging economies, rather than developed countries, being the main driver, Ansa said.

The fund only marginally trimmed its forecast for next year’s growth in China to 10 per cent from 10.5 per cent, Ansa reported, and left its forecast for the Indian economy unchanged at 8.4 per cent.

The IMF’s forecast for euro zone growth was cut to 2.1 per cent from 2.5 per cent, while the outlook for Japan was lowered to 1.7 per cent from 2 per cent, Ansa reported.

‘The risks are firmly on the downside, based on the fear that the tensions on financial markets could increase and cause an even more marked global slowdown,’ Ansa quoted the IMF as saying.

The European Central Bank ‘can keep rates on hold in the short term as a result of the downside risks to growth and inflation stemming from the turbulence on markets’, Ansa reported the IMF as saying.

‘However, when these risks subside, further monetary tightening may be necessary,’ the IMF said.

Source: REUTERS (The Straits Times 10 Oct 07)

Marina Bay condo to be launched next year

Developers expect high prices, with smaller units costing at least $4m-$5m

MARINA Bay Suites, the second and last residential block at the Marina Bay Financial Centre, will be launched early next year, as prices in the area continue to climb.

The developers – Cheung Kong (Holdings)/Hutchison Whampoa, Hong Kong Land and Keppel Land – are expecting strong interest in the condo, as well as high prices.

Market estimates expect smaller units to fetch at least $4 million to $5 million.

Sales for Marina Bay Suites have yet to start, although the condo was marketed recently at a Shanghai property exhibition.

Clients from China and Hong Kong made up almost 20 per cent of those who bought units at the first Marina Bay Financial Centre condo.

Marina Bay Suites will be marketed in Dubai next week, and then in Hong Kong.

It will have 223 three- to four-bedroom apartments ranging in area from 1,500 sq ft to 2,500 sq ft – all with private lift lobbies.

There will be a single-level penthouse on the 65th floor, and two duplex penthouses on the 63rd.

‘Marina Bay Suites will be a fitting, even more upscale, sister development to the 428-unit Marina Bay Residences, which sold out in just three days in December last year,’ said the condo’s head of residential marketing, Mr Kan Kum Wah.

There is talk that the 65-storey Marina Bay Suites could be priced at an average of $3,000 per sq ft (psf).

Mr Kan said it was too early to decide on pricing, although the developers will take ‘close reference’ to subsale prices of Marina Bay Residences.

The highest sub-sale price recorded for Marina Bay Residences was $3,600 psf in June. This compared with the average apartment price of around $1,850 psf at last December’s launch, when penthouses sold for up to $3,450 psf.

Recent Marina Bay Residences deals in August ranged from $2,061 psf to $3,080 psf for the 732 sq ft to 1,981 sq ft apartments.

A unit at the popular The Sail@Marina Bay nearby went for as high as $3,301 psf in August.

In the same month, other deals for apartments as small as 667 sq ft were recorded at $1,300 psf to $2,999 psf.

Phase one of The Sail – the first condo in Marina Bay – was launched at below $1,000 psf in late 2004.

 

Source: The Straits Times 10 Oct 07

Next-gen HDB housing to offer greener lifestyles

Minister notes keen interest in such housing: 80% of first eco-precinct taken up

SINGAPOREANS increasingly aspire to greener lifestyles and the next generation of public housing will cater to these needs.

Minister for National Development Mah Bow Tan delivered this message on growing interest in environmentally sustainable housing at the annual Housing Board awards and public housing seminar yesterday.

Nearly 80 per cent of Singapore’s first eco-precinct, Treelodge@Punggol, a public housing project launched by HDB in March, has already been taken up.

‘The strong public interest for this project demonstrates support from Singaporeans for a greener lifestyle,’ Mr Mah stated in a speech delivered by Parliamentary Secretary (National Development) Mohamad Maliki Osman to a 500-strong audience on his behalf.

Some green features at Treelodge@Punggol, due for completion in 2012, include solar-powered corridor lighting and common areas washed by recycled rainwater.

Mr Mah also called on the private sector to play a ‘key role’ in remaking the heartland. ‘A holistic approach, with close collaboration among industry partners, is needed for sustainable development of public housing to succeed,’ said Mr Mah.

This year’s seminar featured industry speakers addressing the theme: Sustainable Construction And Technologies.

HDB also launched a guidebook for the industry yesterday, called The Green Housing Book, which showcases its environmental initiatives over the years.

This included HDB’s innovations in the areas of environmental sustainability, energy, water, and resource materials.

Local firms were also recognised for their contribution towards good-quality public housing at the HDB awards.

Building firm Ho Lee Construction received two HDB Quality Awards for the building and upgrading categories.

One of its projects, Seng Kang Neighbourhood 2, was commended by HDB as ‘quality public housing with finishes comparable with that of private developments’.

‘We’re very happy and encouraged to receive the award, as it’s the first for the company from HDB,’ said Ho Lee senior project manager Susan Seah. Four other firms, including Teambuild Construction, a contractor, and EM Services, a supplier, also won the awards.

Local architectural firm Surbana International Consultants was the big winner of HDB’s design awards, bagging all three awards in the architecture category for its work on The Coris in Seng Kang, Ghim Moh Gardens, and Marine Terrace Walk.

Four construction firms, including Welltech Construction and Fonda Construction, won the HDB Construction Safety Awards.

 

Source: The Straits Times 10 Oct 07

MANAGING AGENT FOR 120 FLATS – Katong Hostel top bidder in HDB tender

A SMALL firm, Katong Hostel, has emerged as the top bidder in a tender to find a managing agent to lease out 120 HDB flats.

The flats – likely to be let to international students and expats – have been vacated ahead of redevelopment under a pilot HDB scheme.

They will be leased out for three years with an option for three more years.

The 60 three-room flats and 60 four-room flats are in Blocks 1, 3, 5, 7 and 9 in Tiong Bahru Road.

The residents have moved to new flats under HDB’s Selective En-bloc Redevelopment Scheme which is designed to add new flats to meet demand.

Katong Hostel’s bid of $230,280 a month is 22 per cent above the next bid of $188,000, the provisional tender results released by the HDB yesterday showed.

That price is the sum the agent proposes to pay HDB to lease the flats – to be leased in turn to tenants.

Katong Hostel, which provides international student housing, is part of the Vita Group of hostels.

The tender, which attracted 15 widely varying bids from small firms and individuals, comes amid growing demand to lease HDB flats in a rising market.

The lowest bid came in at a mere $600 a month.

HDB has said that it will decide whether to expand the scheme, based on the tender response, as it has a potential supply of 4,000 to 5,000 flats which could boost supply in the next three years.

 

Source: The Straits Times 10 Sept 07